Why FORCING Employers To Pay $15 An Hour To Entry-Level Workers Will Not End Well For Anyone

Apr 29, 2016

Does it really help if Sally makes $3 more an hour if Suzie has no job?”

It’s really a pretty simple equation. Businesses are in the business of making money. If workers are going to tell the employers how much they HAVE to pay them, the employers are going to look for ways to eliminate the worker…

A new mega-McDonald’s comes complete with a glimpse of the future as fast-food chains respond to legislation enforcing minimum-wage hikes.

In addition to adding bottomless fries to their menu and revamping the atmosphere to provide armchairs and couches, a Missouri McDonald’s will have kiosks taking orders instead of people.

Owner Chris Habiger said the kiosks will make it easier for customers to order. But efficiency is not all the kiosks represent.

Andy Pudzer, CEO of Hardee’s and fellow fast food giant Carl’s Jr. said moving from people to technology is the future of the fast food sector.

He said the need to explore an “employee-free restaurant” is linked to higher minimum wage rates imposed by state and local governments. New York State and California are two of the largest states to recently embrace the drive for a $15 minimum wage.

“With government driving up the cost of labor, it’s driving down the number of jobs,” Pudzer said. “This is the problem with Bernie Sanders and Hillary Clinton and progressives who push very hard to raise the minimum wage. Via: Western Journalism

It’s not just the fast food restaurants that will be affected by forcing employers to raise the minimum wage to $15/hr. These radical policies will change entire neighborhoods and communities:

Seattle’s $15 minimum wage law went into effect on April 1, 2015. As that date was approaching, restaurants across the city were making the financial decision to close shop.

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” Seattle Magazine,

“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

“He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs). The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year.

Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.”

A spokesman for the Washington Restaurant Association told the Washington Policy Center, “Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like… Seattle is the first city in this thing and everyone’s watching, asking how is this going to change?” The Washington Policy Center,

“Seattle is rightly famous for great neighborhood restaurants. That won’t change. What will change is that fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy. People probably won’t notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.” Via: Shift